This is a good place in general to learn; this discussion in particular addresses the issue of money stock growth and pending inflation.


http://www.econtalk.org/archives/2009/02/meltzer_on_infl.html

Bringing this back to our industry, the Governor of Maryland proposed a reduction in funding for the history museum program from $1 million to about $150,000. This fund has been an annual source of funding for small to mid-size capital projects for us.

Wesley

While we may get the bulk of our donations from comparative paupers who don't get their tax rates increased, a few of our pauper donors may be employed, directly or indirectly, by rich people, or businesses that they patronize and charities that they support. If the rich cut back on their spending or donations, it may still indirectly affect our museums.

Well I can certainly sympathize with the difficulty of conveying advanced concepts through a politicized internet forum. But unfortunately, portraying it as "much too complicated to explain" tends to lend the impression of a snow-job :)

Too many dollars chasing too few goods... like the real-estate bubble? Or the stock-market run-up? Yes, I remember the very real inflation that occurred in those times. If the runup is inflationary, is the run-down not deflationary? If the country suffers deflation, don't activities which are ordinarily inflationary tend to slow the deflation?

My girlfriend recently observed that she had always presumed that the economists and financial advisors know everything, and recent events have proven that's just not so. One must not assume all economic theory is valid; some of it led us to this recession.

I don’t see how economic theory had anything to do with causing this recession. Action caused it. The action was the national collective underwriting of risk by the lowering of credit standards of Freddie and Fannie, in order to expand lending to under-qualified borrowers so they too could buy houses. Now we are paying the claims on the damage caused by that collective assumption of extra risk. Economic theory did not cause this. If anything, it predicted it.

Some theories did. Others didn't. Here's Greenspan on that... http://www.bloomberg.com/apps/news?pid= ... 5qh9Up4rIg

I’m not sure what Greenspan means. You have to remember that he was regarded as a marvel at saying things that nobody understood. He took pride in that. I believe he once said that if he was ever understood, he would be failing in his job.

Quote from your link:

``If we are right 60 percent of the time in forecasting, we are doing exceptionally well; that means we are wrong 40 percent of the time,'' Greenspan said. ``Forecasting never gets to the point where it is 100 percent accurate.''
Well fine. I would only hope that the 40% occurs in a time where there is relatively less at stake; say 20% less just to put a number on it.

Quote from your link:

Today Committee Chairman Henry Waxman, a California Democrat, said Greenspan had ``the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis.''

That is a red herring. It was not irresponsible lending practices by the lenders that led to the subprime mortgage crisis. It was the increase in the assumption of lenders’ risk by congress that allowed lenders to take a bigger chance with borrowers. The risky loans were indeed created by the lenders, but they were mandated and underwritten by congress.

Quote from your link:

Greenspan reiterated his ``shocked disbelief'' that financial companies failed to execute sufficient ``surveillance'' on their trading counterparties to prevent surging losses.

I don’t see why he is shocked. Financial companies let their guard down precisely because congress assumed their risk with a guarantee of public funds. Being in the money lending business without risk is a wonderful life.

On a different note...

Due largely to problems in its finance unit, shares of GE trade at $7.41 (closing today), down 76 percent in the past year, and nearly 90 percent since their peak in 2000.

GE recently cut their dividend-for the first time since 1938 !!

In many quarters, GE is seen as a bellweather for the economy in general.

Hmmm...

DPK

BTW, the latest Lundberg survey show gasoline prices beginning to trend upwards on a national basis on account increased demand.

Bottom line for most large donors at this point is probably: is the investment going into a project that will improve the viability of the organization, to benefit a specific project or to save the organization from imminent danger? If you do not meet those criteria, they may be hesitant to donate (assuming that they have any resources to donate).

Here in Arizona, the state is totally axing historic projects. The annual Civil War reenactment at Picacho Peak has been canceled. The University of Arizona is closing its planetarium and science center indefinitely. Tourism is off significantly here which only adds to the pain. The Legislature is working on the next budget and museums and other non essential projects will be lucky to get anything at all. If people are donating, it's to their local church, school or charity.

The situation with Old Pueblo Trolley's Street Railway Division is one bright spot in an otherwise bleak outlook. All of our restoration and maintenance projects are moving forward and we have raised close to $40k in donations for the acquisition of an operable Australian RW-2 to be imported for our use. We've only raised about a third of the money but are hopeful to have the car in hand within a year. We are also looking forward to the expansion of our route-paid for by the City of Tucson which entailed the replacement of the Southern Pacific Railroad overpass on 4th Avenue and the extension into downtown for first time in over sixty years. Our ridership has continued to increase and we hope for another record year. Operating only on Fridays, Saturdays and Sundays with limited hours of operation, we carry more than 33,000 passengers annually-all on a line of one mile but soon to be 1.3 miles. We're strong now and will be even stronger when the modern streetcar is completed in 2011.

Mothball time for us? No way. We need more cars and we need them yesterday. Once fuel prices are back up, we'll need even more cars. Our total daily operating costs for power right now is $30 a day. More cars equals more income if scheduled properly.

In the silver lining department, this is a great time to be in the car storage business. Rates are going up and unsolicited calls for storage are coming in.

As an economic indicator, one of the trade magazines reported that in December there were over 1,200 miles of stored cars. Journal of Commerce reports on a new (to me at least) storage place for empty containers, container ships which have been laid up. There are over 1.12 million 20' equivalent containers in storage.

Over one hundred unit coal train sets are in storage. This is largely driven by faster turn times as the Class I's aren't burdened with capacity issues as they were a couple of years ago. I will be receiving two sets before the end of the month.

How long will the good times last? GE Railcar is willing to sign five year agreements to lock in storage.

Rates used to be a dollar a day per car. The highest I have heard about recently is eight to twelve dollars where the cars are accessible in yards.

Alex Huff
DSRC

Not even the 'heavyweights' of the museum world are immune:

http://www.nytimes.com/2009/03/13/arts/ ... html?ref=n


DPK

TAN: Tyburn Railroad has just found that ConRail Shared Assests is doing its part to combat the glut of stored cars. They are laying off crews at Morrisville and other places, so that more cars in transit will tarry in yards along the way, which would otherwise be almost empty.

The local television current events Sunday morning "talk" program today had a lineup of officials from charity and non-profit organizations in this state, all discussing how their donations have fallen through the floor in the last couple of months. Listening to these people talk, the stories were all quite impressive, but what was also very memorable was their amazement at finding that it was THEIR donors who were contributing less.

PC